By Jessica Resnick-Ault and Marianna Parraga
NEW YORK (Reuters) - Global energy leaders and other luminaries like Microsoft (NASDAQ:MSFT) co-founder Bill Gates bored in on the tough road to transforming world economies to a lower-carbon future at the kickoff of the all-virtual CERAWeek conference on Monday.
Within that, there was a notable bit of tension as some oil and gas executives still asserted their primacy, noting the need for fossil fuels to drive economic activity. CERAWeek, the world's largest oil-and-gas conference, returns this week after a hiatus in 2020 due to the coronavirus pandemic, and at a time when oil demand is still struggling to recover from the demand destruction wrought.
Panelists were quick to talk up ambitious plans for lowering carbon emissions, boosting investment in new technologies related to hydrogen, carbon capture and renewables.
However, the primary message was that achieving "net zero" - where polluting emissions are offset by technologies that absorb carbon dioxide for the atmosphere - is going to be difficult.
"There just isn't yet enough renewable energy to fuel all of the energy that people need. That's in developed countries," said Andy Jassy, head of Amazon.com (NASDAQ:AMZN) Inc’s cloud division who will succeed Jeff Bezos as CEO this summer.
He said the company had announced its goal for net zero emissions at a time when it had not entirely figured out how to get there.
In a keynote discussion, Gates focused on what he called the "green premium," the cost of products or investments that are more environmentally friendly compared with those that emit more pollution. As technologies improve, those costs will decline.
Coronavirus stopped billions of people from traveling and wiped out one-fifth of worldwide demand for fuel. The U.S. fossil fuel industry is still reeling after tens of thousands of jobs were lost. The pandemic has also accelerated the energy transition, interrupting a steady rise in fuel consumption that may have otherwise continued for several more years unabated.
Since the 2019 conference, many of the world's major oil companies have set ambitious goals to shift new investments to technologies that will reduce carbon emissions to slow global warming. U.K.-based BP (NYSE:BP) Plc has largely jettisoned its oil exploration team; U.S. auto giant General Motors Co (NYSE:GM) announced plans to stop making gasoline and diesel-powered vehicles in 15 years.
"The tone is different: There's one theme that permeates the entire conference and that is energy transition," said CERAWeek Founder Dan Yergin, vice chair of IHSMarkit.
Several of those oil companies also wanted to make clear that they had a role to play as well. “One of the most urgent things we can do to combat global warming is to back carbon-emitting companies that are committed to get to net zero,” said BP CEO Bernard Looney.
Other speakers expected to appear at CERAWeek include Mohammed Barkindo, secretary general of the Organization of the Petroleum Exporting Countries, and CEOs of Exxon Mobil (NYSE:XOM), Total, Chevron (NYSE:CVX) and Occidental Petroleum (NYSE:OXY).
But they will participate in panels focusing on the energy transition. Barkindo will discuss what kind of a recovery oil and gas will have as future demand is challenged. Occidental CEO Vicki Hollub and Ahmed Al Jaber, United Arab Emirates minister of state, are slated to tackle cutting carbon emissions.
Oil companies have come under increasing pressure from shareholders, governments and activists to show how they are changing their businesses from fossil fuels toward renewables, and to accelerate that transition.
However, numerous speakers warned that the viability of certain technologies, such as hydrogen, remains far in the future.
“Hydrogen will not be the solution to each and every thing,” said Siemens Energy CEO Christian Bruch. "I don’t see really a large scale commercial viability any time before 2025 or even the end of the decade."